The Cost of Prejudice

The first question at the Pentagon press conference following the decision by the U.S. Supreme Court to strike down Section 3 of the Defense of Marriage Act (DOMA) was how much will it cost the Department of Defense (DOD) to implement the provision of federal benefits to married same-sex couples? What is striking about this question is it would not have been asked if these servicemembers had entered into a heterosexual marriage while in the military, however, it does raise the issue of how the Supreme Court decision will affect the bottom line and what it means not only for the military, but also for corporate America.

American companies, regardless of whether or not they support gay rights, are facing very complicated and contradictory challenges as they adhere to the laws existing in many U.S. states that discriminate against gays, while providing federal benefits to their same-sex employees. The situation is going to be a nightmare and costly -- not because they need to provide more benefits now, but because of the issues involving the actual implementation of the benefits.

Let's see, where shall we begin? Say there is a company with a corporate policy to provide all benefits entitled to its employees, whether gay or straight. The company is based in the Commonwealth of Virginia, which has outlawed gay marriage, yet the company has employees who work in all of the states. Some of their same-sex employees are legally married in other states, but work in Virginia; can the company offer them marriage benefits? And what happens when the company's gay married employee moves from California, where she was getting full marriage benefits, to Virginia and now lives in a state that doesn't recognize her marriage? Will those benefits have to be retracted, or will the benefits remain? If the company can and does allow the benefits to remain, will it wonder if it is now less competitive, from a financial point of view, than another Virginia company who is not providing benefits to married same-sex employees, or is it part of the company's talent retention policy? And how many resources will it require to build the system that tracks who is entitled to what and where do they currently live? Answering and tracking these complexities between the states and the federal government is going to become incredibly onerous, affecting the bottom line of businesses throughout America.

For military members there are other complications arising from restrictions at the state level that conflict with the federal level. For example, what about that National Guardsman who was legally married in Massachusetts, but now lives in Alabama? When he is not under federal control and is carrying out duties within the state, he and his husband are not eligible for federal benefits because he falls under Title 32, which is governed by the states. But when he is activated to serve in Afghanistan, he is under federal control and his designation changes to Title 10, which is governed under federal law. So for the year he is on active duty, he and his husband are eligible for the benefits, but when he is deactivated and returns to Alabama, the benefits will be withdrawn. Who and how is this all going to be managed, and where will the funds come from to track state-by-state variations?

And then there are the veterans. They served and sacrificed for their country in silence, with their personal life and partners invisible. When they start reading the fine print and interpretations of the Supreme Court ruling, they notice something troubling. DOD regulations regarding federal benefits are based on where you got married, not on where you live. But the regulations governing the Department of Veteran Affairs are based on where you live. The veterans now realize that unless the President and Congress act, veteran benefits that heterosexual spouses are entitled to are still not available to their same-sex spouses.

There are over 1,100 federal benefits that are affected by the overturn of Section 3 of DOMA, but at what cost does the celebration come: to the gay individuals who still do not have full equality as American citizens, the cost of inequality inflicted by some states remains unchanged, while the costs to sort out all the restrictions between states and the Supreme Court ruling and to compliantly implement benefits to married same-sex couples, will place burdensome costs on corporate America and the federal government in order to preserve prejudice at the state level.

To date, there is no outcry, but as American companies start wrapping their heads around the costs involved with implementing this quagmire of regulations, an unsustainable policy, they should strongly voice their objections and fight against the cost of prejudice.